Coalition challenges petition to repeal new commerce tax

CARSON CITY — A group called The Coalition for Nevada's Future on Thursday filed a legal challenge to a referendum sought by GOP anti-tax advocates who want to put the new commerce tax on the 2016 general election ballot for repeal.

The filing in Carson City District Court argues that the referendum filed with the secretary of state's office by the political action committee called "Rip Commerce Tax" has multiple legal problems and should be invalidated.

"The Nevada Constitution allows for a referendum on 'a statute or resolution or part thereof enacted by the legislature,' " the legal challenge says. "A bill is neither a statute, nor a resolution. The RIP Commerce Tax Petition is merely a measure setting forth parts of a Senate bill considered by the 2015 Legislature."

The filing also argues that the petition's "description of effect" is misleading and lacking in meaningful information needed to inform those who would sign the petition of its purpose and effect.

Attorneys Matt Griffin and Kevin Benson also argued in the filing that the referendum seeks to repeal a broad-based business tax "and plunge the state into a budget deficit."

"The measure seeks the voters' input on provisions that generate hundreds of millions of dollars to the state in each biennium, yet gives the voters no mechanism to understand how that revenue will be replaced, or how state expenditures will have to be cut if those provisions are repealed," the filing states.

State Controller Ron Knecht, one of those seeking to put the new levy on the ballot for voters to decide, said when the referendum was filed that he expects it to survive the legal challenge. He said the commerce tax on the state's largest businesses would raise only about $60 million a year and could easily be eliminated without seriously harming the state's two-year, $7.4 billion budget.

If the referendum withstands the legal challenge, backers would have to gather about 55,000 signatures by June 2016 to qualify it for the ballot.

The commerce tax was part of a $1.4 billion revenue package sought by Gov. Brian Sandoval and approved by a majority of state lawmakers to fund the current two-year budget, including a big increase in public education spending.

Sandoval is opposed to the petition, and recently called any such measure "a wrongheaded attack on the children and families of Nevada."

"Supported by more than seventy percent of legislators, the revenue the petition seeks to eliminate will go directly to the classroom and give teachers the resources to deliver a quality education," he said.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801